The Spiky World of Innovation

In a famous line from his best-selling book, Thomas Friedman wrote: "When the world is flat, you can innovate without having to emigrate." But instead of flattening out across the world, innovation remains extraordinarily concentrated and spiky.

That’s the takeaway from a massive new database on patented innovations developed by the Organization for Economic Cooperation and Development (OECD). The OECD REGPAT database is based on international patents and patent applications under the international Patent Cooperation Treaty and covers more than 2,000 city-regions across the OECD nations. Check out its fantastic interactive "Regional Innovation Mapper" tool here.

The first map above shows the number and share of global patent applications by nation (including the European Union) of the world. The E.U. has the largest share with roughly 30 percent of global patents, followed closely by the United States, and then Japan and China.

The second map shows the number of global patents for states, provinces, and countries. Note the substantial bubbles around California and the East Coast in the U.S., especially Massachusetts; Northern Europe and Scandinavia; and Japan, South Korea and China in Asia. Much of the rest of world is completely blank.

The third map charts patents for the world’s major city-regions. Again the pattern of concentration, or spikiness, is striking. The United States has major concentrations on the East and West coasts and the Midwest. Patenting is even more concentrated in Europe and Asia. In Europe there are major clusters in Southern Germany, Switzerland, Southern Sweden, Finland, the greater Paris region, and Rhone-Alpes. Patenting in Asia is clustered in and around Tokyo and Osaka, Japan; Seoul, Korea; Shanghai and Beijing in China, and Australia’s East and West coasts. And again, huge swaths of the world are completely blank.

An analysis of the OECD data by Jonathan Rothwell of the Brookings Institution identifies the overwhelming dominance of cities and metropolitan areas in the generation of global innovations.* Rothwell found that more than nine in 10 (93 percent to be exact) of the world’s patent applications are generated by inventors living in metropolitan areas that are home to less than one in five (23 percent) of the world’s population. And it gets even spikier:

Ten metro areas account for just 2 percent of global population, but are home to the inventors of 24 percent of the world’s patent applications. They are, in order, Tokyo, San Jose, New York, Boston, Kanagawa (Japan), Shenzhen (China), Osaka, San Diego, Los Angeles, and Seoul. The five U.S. metro areas on that list spur 12 percent of patent applications, even though they represent just 1 percent of world population.

But the United States appears to be losing ground in global innovation. The U.S. share of global patents fell from roughly 40 percent in 2000 to 28 percent by the end of the decade, according to the OECD data. Asia has come on strong with both Japan and China seeing their share of global patenting rise by 6 percentage points each. But Europe is no slouch either. "Europe is hardly the sclerotic continent that many Americans—especially politicians—make it out to be,” writes Rothwell. “Most of world’s top regional hubs of innovation are in Europe." In terms of global innovation, Rothwell notes that “the most innovative countries per capita are all small nations: Sweden, Switzerland, Finland, Israel, and Denmark.”

The uneven geography of innovation is striking. Even in an advanced nation like the United States, San Diego produces 135 times more patents per person than Aberdeen, South Dakota, according to Rothwell's analysis.

The clustering of innovation is a key feature of knowledge economies and a powerful factor in economic growth. On the flip side, It's concentration and uneven distribution contributes to an increasingly unequal world.

* An earlier version of this post misspelled Jonathan Rothwell's name.

About the Author

Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a University Professor and Director of Cities at the University of Toronto’s Martin Prosperity Institute, and a Distinguished Fellow at New York University’s Schack Institute of Real Estate.